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Social media-induced failures in the market for news information

February 25, 2017 - 15:01 -- Admin

The web and social media, such as FB, comprise an innovation that, in some ways, makes us all worse off. For example, FB undermines the printed media because individuals almost endlessly provide hyperlinks to it, thereby providing an open access alternative to buying the content by, for example, purchasing a newspaper. The result is that the newspapers decline in circulation and suffer economic adversity for reasons linked to a failure in the market for information This, in turn, leads to cost cutting and staff redundancies in newspapers and other media which feed back into lower quality journalism, to lower quality pilfered links in social media and, ultimately, to a more poorly-informed public. News, once published, can be digitized in many ways and. to some extent, this always involves a public good type of market failure – one newspaper can pilfer from another, for example.  But this type of theft becomes much more severe when millions of web users have access to this type of pilfering by simply citing a hyperlink.

The only way to get, at least partly, out of this downward spiral is to get rid of the externality here by rigorously defending the property rights of the commercial media to the news they provide. That applies both to individual users of social media and to news gathering organizations that rely primarily on pilfered material for their such matter.

It is technically possible to prevent hyperlinks to published material but much harder to prevent lengthy quotation of pilfered material. Of course, no-one likes to pay for material that they are currently accessing for free but the alternative is an ever-diminishing level of effort in providing news and the end of such things as investigative journalism. This disadvantages us all because we all then operate “in the dark” in settings where a knowledgeable few can set the social agenda.